Pension Funds: Retirement-Income Security and Capital Markets: an International Perspective

ABO accumulated benefit obligation; liability of a defined-benefit pension fund if it were to be wound up immediately.

ABP Dutch funded pension scheme for civil servants.

accrual of benefits process of accumulating pension credits for years of
service (for defined-benefit funds) or accumulation of assets (for definedcontribution funds).

actuarial assumptions assumptions made by actuaries in assessing the
funding status of a defined-benefit fund (such as expected rates of return,
mortality rates, wages growth, discount rate, projections of rate at which
employees join and leave the plan).

actuarial fairness concept in insurance implying that the expected present
value of benefits (on a given set of actuarial assumptions) equals the
present value of contributions.

ADR American Depository Receipt; a claim issued by a US depository
institution to an underlying share of stock in a foreign company.

adverse selection situation in which a pricing policy induces a low average
quality of sellers in a market, while asymmetric information prevents the
buyer from distinguishing quality. When it is sufficiently severe, the market may cease to exist.

agency relationship contract under which one or more persons (principals) engage another (the agent) to perform some service on their behalf
which involves delegation of some decision-making responsibility to the
agent.

agency costs costs arising from the deviation between the agent's and
principal's interests in an agency relationship. Includes both the costs to
the principal of the behaviour of the agent and any expenditures incurred
by the principal (or agent) in order to control the agent, such as monitoring expenditures by the principal and bonding expenditures by the agent.
Two main types of agency problem are identified in this book: first, the
costs arising in the debt contract between debtors and creditors, which
may include pension funds; second, the costs arising in the relationship
between managers of a firm and shareholders such as pension funds.

AHV/IV Swiss pay-as-you-go social-security system.

Anglo-Saxon countries term used to refer to English-speaking advanced
countries with developed capital markets as well as banks ( UK, USA, Canada, Australia, NZ).

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